Luxury marketing outlook_2013

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  • 1. LuxuryMarketingOutlook 2013Luxury DailyA CLASSIC GUIDEJanuary 2013$595TMwww.LuxuryDaily.comTHE NEWS LEADER IN LUXURY MARKETING
  • 2. PAGE 2 Luxury Daily LUXURY MARKETING OUTLOOK 2013PAGE3CONTENTSEDITOR’S NOTEDigital to underpin luxury marketing with eyes onstoreBy Mickey Alam KhanTRENDS5 luxury marketing trends to watchBy Tricia CarrADVERTISINGInteraction, consistent messaging to propel digitalad campaignsBy Tricia CarrDIRECT MAILInventive, personalized mail to best leverage luxurybranding effortsBy Tricia CarrIN-STOREIn-store experience to be advanced by 360-degree,tailored approachBy Tricia CarrCOMMERCEInternational, cross-channel transactions to be keydrivers of luxury spendingBy Tricia CarrINTERNETMobile integration to rev up digital marketing,branding effortsBy Erin SheaLEGAL/PRIVACYDigital authentication to be most effective at com-bating counterfeitingBy Tricia CarrMOBILEMobile to stand out as most influential platform in2013By Erin SheaMULTICHANNELMultichannel campaigns to break down barriersbetween marketing mediumsBy Erin SheaOUT-OF-HOMEOut of home advertising to bring life to screen-based campaignsBy Tricia CarrPRINTPrint to be most influential in 360-degree cam-paignsBy Erin SheaRADIORadio to remain relevant with future innovationsBy Erin SheaPAGE4811142023252730323436TELEVISIONCable spots hold most value for luxury marketersBy Erin Shea3817 EVENTS/CAUSESEvents to distinguish luxury marketers throughsurprises, storytellingBy Tricia CarrL’Odyssée de Cartier
  • 3. igher taxes in France and the United States, slowing de-mand in China and Europe, counterfeiting, store overex-pansion, product overexposure and over-reliance on Flashare the key issues that may hurt luxury businesses this year.But effective product differentiation, continued high-qualitystandards, careful distribution, holding the price line, tightercuddling of the customer and smart marketing will ensure thatluxury has another bumper year ahead.If anything, the luxury customer has proved resilient and loyalthrough four years of global turmoil. What kept this demo-graphic spending was the level of expectation sought and met.That has to be the mantra this year, too – treat the customerlike family and, in return, get almost unconditional love.Dialogue is the new blackMarketing has a critical role to play in piquing interest andgenerating demand. To their lasting credit, luxury brands andretailers last year ran marketing programs and campaigns thatwent toe-to-toe with their main street counterparts, even best-ing them in customer relationship marketing efforts. That em-phasis has to continue this year in an environment of politicaland economic uncertainty.Expect luxury marketers in 2013 to intensify their use of socialmedia – Facebook, Twitter, Pinterest, YouTube and Instagram– to connect with customers and prospects. Dialogue is in.Their PC and mobile Web sites will get a drastic makeover, andapplications across Apple and Google platforms will prolifer-ate. Use of digital tools, including video, to showcase the brandstory will increase, much of it designed to drive traffic in-store– more often than not, the main purpose of such sophisticatedmarketing and content. The store is where the action is at, andwill be.Shoppers will also expect luxury brands and retailers to haveeasy-to-navigate ecommerce and mobile commerce offerings.Digital sales of products and services will jump, aided by tar-geted email and search marketing, as well as wise online dis-play banner ad buys. Indeed, online and mobile retail will enableluxury marketers and retailers to cross borders and meet pent-up demand.On the broadcast side, radio will get a minimal share of luxurymarketing dollars, while television is slowly but steadily becom-ing an option for luxury automobiles, fragrances and hotels.More attention will need to be paid to direct mail and catalogs– nothing beats the tactile and visual experience of holding abook with luscious images and absorbing the story narrated bythe brand.Meanwhile, outdoor advertising will maintain its top-of-mindrole. So will print, which will hang on to its title as the most ef-fective platform to showcase a brand in all its glory in a curatedenvironment that is trusted by the consumer and the advertiser.MANY THANKS to Tricia Carr for laying out Luxury Daily’s Lux-ury Marketing Outlook 2013 Classic Guide. Also, her reportingand Erin Shea’s, along with insight from industry expects, makethis book an indispensable read for luxury marketers and retail-ers. Thank you to all of them and to Michelle Nance and JodieSolomon, too.All in all, luxury marketers this year will have at their dispos-al the most sophisticated marketing tools to woo and retaincustomers. Their challenge is not to overdo it and cheapen themarketing and the product.Luxury Daily LUXURY MARKETING OUTLOOK 2013PAGE 3EDITOR’S NOTEDigital to underpin luxury marketing with eyes on storeHMickey Alam Khanmickey@napean.comLuxury Daily is the world’s leading luxury marketing and retail publication. The Napean-owned franchise comprises Luxury Daily, LuxuryDaily.com, the Luxury Daily newsletter, Luxury FirstLook, LuxuryRoundtable, Luxury Retail Summit, Luxury Women to Watch, Luxury Marketer of the Year, Luxury Retailer of the Year, Luxury Daily Awards, webinars and Classic Guides. ©2013 Napean LLC. All rights reserved. No part of this publication may be reproduced without permission.401 Broadway, Suite 1408New York, NY 10013Tel: 212-334-6305Fax: 212-334-6339Email: news@napean.comWeb site: www.LuxuryDaily.comFor newsletter subscriptions:http://www.luxurydaily.com/newsletterFor advertising:http://www.luxurydaily.com/advertise/For reprints:ads@napean.comMickey Alam KhanEditor in Chiefmickey@napean.comErin SheaEditorial Assistanterin@napean.comTricia CarrEditorial Assistanttricia@napean.comMichelle NanceEvent Coordinatormichelle@napean.comJodie SolomonDirector, Ad Salesads@napean.com
  • 4. PAGE 4 Luxury Daily LUXURY MARKETING OUTLOOK 2013rends are emerging to suggest that affluent con-sumers crave a mix of technology and traditionwhen interacting with luxury marketers.It is safe to say that all marketers looked to strengthentheir presence on digital and mobile mediums last yearto keep up with the consumer demand for cross-channelcontent. At the same time, affluent consumers are longingfor special attention from marketers through traditionalchannels such as in-store and print.Marketing trends that manifested during 2012 show thatluxury brands and retailers established a definitive voiceon print, digital and mobile. Here are five luxury marketingtrends to keep in mind:Mobile enhances the traditional brand experienceConsumers buy products and services from luxury brandsbecause they seek a quality product as well as an experi-ence that satisfies.Mobile is clearly a versatile medium, hence why so manymarketers are present on the platform.Therefore, retailers and hotel brands look to enhance thephysical brand experience with mobile to be more distin-guished on both fronts.Department store chain Bloomingdale’s rolled out aniPhone and Android application in May so that consumerscan use certain functions depending on whether they arein-store or at home.The in-store bar code scanner lets customers view addi-tional product details and read customer reviews, enhanc-ing the shopping experience through user-submitted con-tent that is not otherwise accessible.In the travel sector, Starwood Hotels & Resorts’ StarwoodPreferred Guest program updated its mobile app last yearto create a seamless, guest-centric experience for all nineof its brands including St. Regis and The Luxury Collection.SPG’s app updates include content based on whether ornot the user is planning, en route or already checked-in toa specific hotel.There are quite a few new features that can leverage theStarwood brand, but particularly a new interface that ag-gregates a user-specific look and content based on theconsumer’s booking and staying process.5 luxury marketing trends to watchBy Tricia Carr TTRENDSBloomingdale’s Big Brown Bag mobile app
  • 5. PAGE 5 ` Luxury Daily LUXURY MARKETING OUTLOOK 2013Technological displays bridge the digital-physical gapDigital is a powerful tool for luxury brands and retailers,but smart marketers keep tabs on their relationships withcustomers across all channels and look to strengthen themthrough face-to-face contact.Technology-enhanced events or displays were not onlyused to impress affluent consumers in 2012, but they alsohelped them to feel more comfortable with the brand froma cross-channel perspective.Some marketers let consumers interact with the brandphysically and digitally at technology-driven displays.For instance, German automaker Audi opened its first digi-tal showroom in London to personalize customer serviceand attract tech-savvy consumers to a more central, com-pact space than a traditional shop.The in-store digital experience called Audi City will roll outto more than 20 international cities by 2015. Offerings atAudi City include one-on-one interactions with Audi cus-tomer service and new bespoke options.Consumers can select vehicle options from a digitalmedia system that include colors, equipmentoptions and functions. There are more than 100 millionpossible configurations.Then, consumers can view their bespoke vehicle on a 1:1scale on large screens.Known for its digital savvy, British fashion house Bur-berry opened its most technologically-advanced propertyin September that was developed as a physical expressionof Burberry.com, fully immersing shoppers in a combineddigital and physical experience.The Burberry store is also more technologically-innovativewhen dealing with merchandising and inventory.Marketers are asserting their expertise through brandcontentMore luxury marketers are looking to immerse consumersin the brand experience by providing content –whether itbe imagery or readings – that asserts them as an expert intheir industry.No longer can it be assumed that consumers are awareof the heritage of a brand or the craftsmanship behind itsproducts and services with the new wave of affluent mill-ennials present in the marketplace.Therefore, market-ers emphasize statusand lifestyle throughdigital storytelling.French fashion houseChanel remodeled itsWeb site to more ef-fectively intertwineproduct browsingwith content and im-agery so that visitorsbecome immersed inthe brand world.Photography andvideos will continueto be more visibleon the site as well asnews items and blogAudi City digital showroom in London
  • 6. posts from its various editorial ventures.Also, French label Louis Vuitton created buzz for this pastsummer’s Shanghai fashion show through a content-based digital initiative that followed a photographer fromthe brand’s base in Paris to the show’s set.The label looked to engage its consumers in the days lead-ing up to the runway show by posting daily videos and im-ages taken by photographer and blogger Todd Selby whilehe traveled by train.The campaign was hosted on a microsite and the labelspread the content via social media.The future of social is commerceMarketers have realized the potential for social media tobuild a strong brand community of loyalists, frequent cus-tomers and aspirational fans.What some are also realizing is the social medium’s influ-ence on sales.Luxury marketers included subtle yet direct commercecalls to action into their social media strategies last yearso that their followers could easily access certain productsor share them with their friends.Oscar de la Renta boosted brand affinity, connectivityand online transactions through its new Web site that itlaunched in August.The site features unique social media interactivity, vid-eos and exclusive content. The interactive elements in-tertwine the buying and social media experience toProduct view on OscardelaRenta.comPhotograph of Russian television personality SatiSpivakova’s home by Todd SelbyPAGE 6 ` Luxury Daily LUXURY MARKETING OUTLOOK 2013
  • 7. result in a new kind of ecommerce.Consumers can select “need,” “obsessed” or “own” on anitem. Clicking on one of these options connects the Os-car de la Renta Web site to Facebook where consumers’friends can see if they own, want or are “obsessing over”a product.Additionally, precision-cut crystal maker Swarovski hosteda street-style contest for this year’s Fashion’s Night Outthat centered on a user-made look book created throughan exclusive partnership with 52Grams, a mobile plat-form where brands can curate shoppable look books fromInstagram images.The 52Grams look book showed all of the tagged Insta-gram images. If a user uploaded an image of Swarovskijewelry, 52Grams tagged the image with a link to the itemon Swarovski’s ecommerce site.To end the year, brands and retailers including MichaelKors and Nordstrom were invited to test the Facebook Col-lections interface that lets users interact with products viaimage tagging.Users can put an item on their Wishlist, add a product-specific comment and click to purchase an item from therespective retailer through the test functions.Marketers reaped the benefits of niche publicationsNew niche publications for the affluent audience emergedlast year in which luxury brands took up the bulk of the adreal estate.Print is a traditional medium that mature consumers prob-ably read often, but it is also a platform that has main-tained its sheen to all age groups due to its contrast withdigital content.Luxury brands and retailers that placed ads in niche printpublications last year not only tapped the luster and life-style of these magazines, but also reached a tailored groupof consumers with compelling imagery.Ralph Lauren, David Yurman, Estée Lauder, Dom Pérignon,Audemars Piguet, Breitling and other luxury advertisersscored key placements in the inaugural print issue of sta-tus publication DuJour.The oversized 312-page publication flaunted a card-stockcover and luxury brand ads throughout, ending with aback-cover Hermès ad.DuJour targets 3 million of Gilt’s ultra-affluent consum-ers, an audience responsible for spending more than $600million annually.Also, Giorgio Armani, Ermenegildo Zegna, Tod’s and LouisVuitton were some of the advertisers in Fairchild FashionMedia’s first issue of M magazine that is geared towardsan affluent male audience.The inaugural M issue featured actor Bradley Cooper, fash-ion designer Karl Lagerfeld, fashion label Band of Outsid-ers and Brooklyn Nets’ CEO.Published quarterly, M includes content on lifestyle, fash-ion, politics, entertainment, sports and cars. M had astarting circulation of 75,000 sent to affluent men with ahousehold income of $200,000.Inaugural issue of DuJourPAGE 7 ` Luxury Daily LUXURY MARKETING OUTLOOK 2013
  • 8. uxury marketers can stand out in the crowded ad-vertising landscape in 2013 by providing interactivecontent including social media sharing as well as aconsistent message across all channels.Interactive content that is personalized to the audienceis another key factor in online advertising where luxurybrands should focus this year. Luxury marketers that pushthe boundaries on digital – where themajority of affluent consumers can befound – will find new ways to engagewith consumers and evolve their adver-tising and marketing practices as digitalcapabilities grow.“Digital should be interaction-driven above all else,” saidAndrea Wilson, Fort Worth, TX-based luxury practice leadat iProspect.“Digital is a common landscape for luxury consumers, soas digital content evolves and the Web grows, brands aretesting how to interact with their consumers in the digitalspace,” she said. “Consumers are sharing their preferencesthrough the actions they take.”Intentional interactionsThe big players in luxury have been increasingthe time spent with their digital ads throughinteractive content such as video andimage galleries.For instance, U.S. label Ralph Lauren showedoff its holiday 2012 collection through a one-day header, banner and side bar ad placementon the New York Times Web site.The interactive component was an image gal-lery that let consumers browse the collectionwithout disrupting the content on the Website. Then, a click-through on the banner adtook users to the Ralph Lauren Holiday 2012Web site to see the collection or locate a store.Also, Italy’s Fendi looked to target a trendy, fashion-for-ward audience with interactive advertisements for its eye-wear on Vogue.com.Fendi took banner and tower ads on the site that featuredthree different campaign shots of models wearing theeyewear and an interactive component where consum-ers could scroll through the collection. Interestingly, Fendilinked one of the ads to its Facebookpage and the other to its Web site.Moving forward, marketers should usea strategic mix of interactive social-and commerce-driven digital ads thatnod to the usage habits of the 2013 luxury consumer, perMs. Wilson.Social commerce was one of the marketing buzzwords cir-culating at the end of 2012 and some marketers followedthis notion to encourage peer-to-peer recommendationsfor their own brand through digital advertising.In fact, 70 percent of consumers prefer to hear about newproducts from Facebook friends rather than brands, ac-cording to a 2012 report by 8thBridge.Interaction, consistent messaging to propel digital ad campaignsBy Tricia Carr PAGE 8 Luxury Daily LUXURY MARKETING OUTLOOK 2013LADVERTISINGRalph Lauren digital ads on The New York Times“Digital should beinteraction-drivenabove all else”
  • 9. Also, 57 percent have asked their friends on Facebook foradvice before purchasing a product.8thBridge polled a group of more than 1,500 consumerson their Facebook usage and interest in social commerce.Italian fashion house Gucci led the pack in terms of socialselling through digital advertising.The label honed in on social inspiration site Pinterest toleverage its digital banner placements by letting consum-ers “pin” fall/winter 2012 apparel and accessories directlyfrom the ads.This program is allowing Gucci to leverage its digital ad-vertising assets to reach a broader group of consumersvia social media platforms and get more value from theseproperties, per the label.Also, Balmain and Laura Mercier looked to grow theirsocial communities through sidebar ad placements onVogue.com that showed their Twitter feeds and ask usersto follow them. The feed mimicked Vogue’s own Twittersidebar displayed on the opposite side of the page.The next challenge for marketers is to influence purchasesthrough social-driven advertising. This can be achievedthrough calls to action.“In order for luxury marketers to allow their digital ad-vertising efforts to reach maximum potential, they shouldensure that each placement contains a compelling callto action along with social, ecommerce and researchfriendly functionality,” Ms. Wilson said.“Those key qualities can make the difference in achievingaction and engagement because it encourages the userto click through and perform the action the advertiser isseeking,” she said.PAGE 9 Luxury Daily LUXURY MARKETING OUTLOOK 2013Gucci digital ads that link to PinterestBalmain sponsored Twitter feed on Vogue.com
  • 10. Channeling luxuryConsistent messaging across all ad channels also increasesthe likelihood that affluent consumers will interact withand recall ad content, per Mr. Wilson.This concept extends beyond digital advertising.Marketers need to keep their message consistent acrossdigital and mobile channels while circulating the samemessaging via channels such as print and out of home.“Consumer convenience is key as consumers expectease, speed and efficiency across every digital interac-tion they experience, whether they are researching yourproducts, finding a store location or purchasing online,”Ms. Wilson said.Towards the end of 2012, French fashion house Chanel notonly stuck to standard print and television placements, butused digital and mobile banner ads to promote its ChanelNo. 5 fragrance video campaign with actor Brad Pitt.The digital ads seemed to be the differentiator in this effortsince the brand counted on its YouTube content to engageconsumers rather than linking to ecommerce.Though the campaign did serve as inspiration for a spoofskit on NBC network’s comedy sketch show “SaturdayNight Live,”Chanel likelyincreased recallof its $7 millionad campaignwith Mr. Pitt.Additionally,French fashionhouse LouisVuitton movedinto televi-sion advertis-ing throughits first com-mercial that ispart of a multi-channel branda w a r e n e s sc a m p a i g n .The “L’Invitation au Voyage” campaign features model Ari-zona Muse who is shown in TV, print and digitalcreative. Louis Vuitton broadened the reach of its cam-paign by using multiple marketing channels, but throughTV and social media it could reach more aspirational con-sumers than affluent prospects.The multichannel approach is essential for luxury mar-keters in 2013. Marketers that take a unified approach tospreading the brand message on a variety of channels willbest leverage their message in 2013.“I also recommend ensuring well-rounded coverage ondevices, channels and tactics to ensure your consumersare learning about you wherever they are in the digitallandscape,” Ms. Wilson said.“For example, a digital display presence across relevantcontent Web sites through direct site buys, behavioral andretargeting campaigns, as well as a strong search enginepresence across desktop, mobile and tablet devices allowsfor ease in awareness and consideration, as well as captur-ing end-of-funnel activities,” she said.“In every instance of digital interaction with your consum-er, the goal should be to communicate, share, educate andentertain, versus solely asking for a sale.”PAGE 10 Luxury Daily LUXURY MARKETING OUTLOOK 2013Chanel No. 5 campaign with actor Brad Pitt
  • 11. International, cross-channel transactions to be key drivers of luxury spendingBy Tricia CarrPAGE 11 Luxury Daily LUXURY MARKETING OUTLOOK 2013uxury marketers that take a cross-channel approachto the consumer shopping experience and intertwinethe in-store, digital and mobile mediums will cater toexisting and prospective customers on a global level anddrive purchases in 2013.Brands and retailers that wish to distinguish the com-merce experience going forward should take into consid-eration the multiple venues on which affluent consumersmake purchases. Specifically, mobile will continue to be anessential medium for reaching international, affluent con-sumers and marketers should work to create an optimized,user-friendly shopping environment on smartphonesand tablets.“Luxury brands have been at the forefront of the ecom-merce experience for many years now, but finding thebalance between rich branding and merchandising inan experience optimized for shopping can be difficult,”said Marko Muellner, senior director of marketing atShoplgniter, Portland, OR.“Some brands have compromised the shopping experienceby going too far on the brand experience, and others havegone too far the other way, impacting the brand nega-tively,” he said. “At the core of all luxury brands is service.“The best ecommerce sites are those that address everydetail of the customer experience and are dedicated to theservice aspects of the channel.”Going globalInternational consumer purchases at U.S. retailers tripledBlack Friday through Cyber Monday, according to data re-leased at the end of 2012 from FiftyOne GlobalEcommerce.International consumers, as a whole, spent themost money at luxury department stores. Theyspent approximately $337 on each transaction.More international shoppers than ever beforeare logging on to shop U.S. retailers, perLCOMMERCEDiane von Furstenberg holiday email campaign“As internationalconsumers begin to buyfrom U.S. luxury retailersonline, they are buildingloyalties and preferences,making it critical forretailers to get in on theground floor”
  • 12. PAGE 12 Luxury Daily LUXURY MARKETING OUTLOOK 2013Jennifer Raezer, head of marketing communications atFiftyOne, New York.These actions are triggered by increased spending bymarketers on localized campaigns.Luxury marketers are also increasing the number of inter-national shipping programs meant to get attention fromnew markets.“Ecommerce allows brands to explore new markets andestablish a customer base without having to address theneed for a physical presence in those particular regions,”Ms. Raezer said. “In this case, ecommerce has a vastopportunity over in-store commerce, reaching shoppersregardless of borders and location.“Failing to pursue international market opportunities earlyon is an oversight of a key and growing segment of U.S.retailers,” she said.“As international consumers begin to buy from U.S.luxury retailers online, they are building loyalties andpreferences, making it critical for retailers to get in on theground floor.”Some luxury marketers expanded the reach of their ecom-merce efforts last year. More are likely to follow in theirfootsteps to tap new markets.For instance, Neiman Marcus Group established itself asan international luxury retailer by expanding to the Asianmarket with an online shopping and editorial site.The retailer took a $28 million stake in Glamour SalesHolding, a private ecommerce company that specializes inauthorized online flash sales for consumers in China andJapan. The company hosts Neiman Marcus’ first ecom-merce site in China.The retailer also began to ship to more than 100 countriesworldwide last year through a partnership with FiftyOne.Additionally, U.S. label Ralph Lauren opened ecommerce toJapanese consumers in the fall via its first digital flagshipstore in the Asian market.The Japanese ecommerce site stocks select items includingthe fall/winter 2012 collection.Luxury marketers are likely moving their attention to mar-keters such as China, India and Brazil due to the globaleconomic crisis, per ShopIgniter’s Mr. Muellner.“While these are massive markets and will take time todeeply influence brands, we will see more global influenc-es in 2013,” Mr. Muellner said. “We will see bigger market-ing efforts in these countries and this will extend onlineand to ecommerce.“Luxury brands are early to pick up on global trends and itwill be fun to watch,” he said.Anytime, anywhereAnother commerce trendthat is likely to be adoptedby more luxury marketersis the commerce-anywhereapproach, per Mr. Muellner.Marketers can reach andconvert more customersby being present on digi-tal channels such as socialmedia networks and mobile,but this strategy can also beextended to television andother mediums.Ralph Lauren Japanese ecommerce site prior to its launch
  • 13. PAGE 13 Luxury Daily LUXURY MARKETING OUTLOOK 2013The use of a social, product-centric expe-rience that seamlessly links to ecommercehelps users go to the next step when theyare ready.In addition, luxury marketers shouldcontinue to learn the basics of mobile-optimized commerce.Those brands and retailers that have mas-tered the basics should move on to moreinnovative approaches such as location-based service, insider access and tablet-friendly experiences.“I think luxury brands will get better atthe nuts and bolts of ecommerce,” Mr.Muellner said. “As the ecommerce chan-nel grows, brands realize that the end-to-end customer shopping experience mustbe the key focus.“They have known this in traditional retailfor a long time and this focus and rigorwill come online,” he said.Service is key to commerce experiences.Marketers can leverage their in-store andonline commerce experiences by mirroringthe must-have services from each shop-ping environment across all channels.Furthermore, brand managers, digitalmarketers, merchandisers, media manag-ers and social, mobile, email and searchmarketers should come together to drivetransactions on any platform.Many brands are bridging the gap betweenphysical and digital commerce by combin-ing the channels in-store.For example, Burberry’s most technologically-advancedproperty in the heart of London was designed to increasecustomer engagement and in-store sales through a digitaland tactile experience that shows off the brand heritage.Features of the 44,000-square-foot store include 100screens, the tallest indoor retail screen in the world and500 speakers.“Ecommerce is a different experience than retail and al-ways will be,” Mr. Muellner said. “The most successfulbrands will be those that figure out how to capitalize onthese differences and elegantly fuse customer needs withthe core brand promise.French label Balenciaga launched a mobile-optimized site in 2012that offers commerce
  • 14. Inventive, personalized mail to best leverage luxury branding effortsBy Tricia CarrPAGE 14 Luxury Daily LUXURY MARKETING OUTLOOK 2013uxury marketers should further explore the poten-tial of direct mail to lure affluent consumers on themost-targeted marketing channel available in 2013.Gaining additional purchases from existing customers canbe best achieved through direct mail efforts that are per-sonalized, innovative and sharply-designed. Luxury mar-keters must also plan mail efforts sufficiently in advanceto get the most from their allocated budget.“I think smart retailers will enter 2013 with the mindsetthat they must do everything possible to keep the custom-ers they have, and woo customers from their competition,”said John Schulte, chairman and president of the NationalMail Order Association, Washington.Luxury in an envelopeDirect mail is a surefire medium through which brands cantarget their customer list.Most luxury marketers use email to reach out to theirlist. Subsequently, consumers’ inboxes are crowded withbranding and product-focusing messaging.Luxury marketers should turn to mail to best leveragebrand- and image-building, customer relations and bot-tom-line sales, per Mr. Schulte.On the digital medium, there are quite a few ways for mar-keters to enhance their messaging. Email lets marketers beinstantaneous, interactive and entertaining in their efforts.But there are ways that marketers can enhance mail ef-forts as well that can keep brands top of mind on a less-crowded channel.In 2012, some marketers incorporated products withirreverent settings and props in catalog images for asofter sell.For instance, British apparel label Alfred Dunhill looked todrive sales by targeting consumers in their homes througha feast-themed holiday gifting catalog.The 32-page, card-stock catalog put the brand’s holidaygifts on display in the midst of the mess left behind after aholiday feast. The images offered many points of focus onLDIRECT MAILFeast image from the Alfred Dunhill holiday catalog“Most retailers have learnedthat for email, while inexpensiveto implement, the competitionfor attention or even be noticedin people’s email box is huge”
  • 15. PAGE 15 Luxury Daily LUXURY MARKETING OUTLOOK 2013not only the merchandise but the carefully-placed detailsin the shots.In addition, Bergdorf Goodman sent a 56-page fall/win-ter shoe book that represented the aftermath of a largecelebration which aligned with the New York departmentstore’s 111th anniversary in 2012.The pages of the catalog were littered with fallen Cham-pagne glasses, corks, balloons, confetti, cakes and otherparty paraphernalia, as well as shoes by Christian Dior,Manolo Blahnik, Christian Louboutin, Alexander McQueen,Jimmy Choo and Chanel.Luxury marketers can also enhance their mail efforts inways similar to print marketing with features such as QRcodes and digital watermarks.Department store chain and Bergdorf sibling Neiman Mar-cus let consumers interact with its 2012 Christmas Bookthrough the NM Action application that read digital wa-termarks on the fantasy gifts pages and revealed extravideo content.Another popular mail medium among luxury marketers ispostcards. These can be enhanced through personaliza-tion, creativity and digital touch points as well.One set of out-of-the-box mail efforts in 2012 was sentfrom BMW North America.The automaker pushed the new 3 Series sedan throughtwo mail campaigns: an envelope of glossy print imagesand a seemingly indestructible postcard.The glossy photographs mailed in one envelopehighlighted the four different styles of the new 3 Se-ries sedan: Sport, Luxury, Modern and M Sport. Theenvelope also contained a letter addressed to therecipient and a booklet describing the new features.Also, the indestructible postcard showed off theall-weather ability of the new 3 Series. It read,“Dunk this card in water, sleet or snow.Witness invincibility.”To size up to email, marketers will use more innova-tions in their mail efforts in 2013 as they realize theimportance of building their in-house customer list,per Mr. Schulte.Enhancements to mail efforts this year will includelayered campaigns with multiple touch points andthree-dimensional mailers.“[One key lesson learned in 2012] is perhaps the im-portance of testing, measuring, analyzing, modify-ing and repeating what works,” Mr. Schulte said. “Ithink many experienced users of direct mail in theretail environment have found that the benefits ofdirect mail cannot be abandoned.“It is less expensive to spendmore for the right listof prospects”Fantasy gift page in Neiman Marcus’ 2012 Christmas Book thatfeatures a butterfly-shaped QR code
  • 16. Letter from CartierPAGE 16 Luxury Daily LUXURY MARKETING OUTLOOK 2013“Most retailers have learned that for email, while inexpen-sive to implement, the competition for attention or evenbe noticed in people’s emailbox is huge,” he said. “Deliveryof the message itself is unreli-able and cannot necessarily becounted on.”Let’s get personalPersonalization is essential sothat marketers get the most ROIfrom direct mail efforts.“Direct mail should be highlytargeted and personal,” saidChris Ramey, president of Afflu-ent Insights, Miami, FL. “It is lessexpensive to spend more for theright list of prospects.”Luxury marketers often includea personalized letter with prod-uct-focused catalogs.For instance, French jewelerCartier flaunted its collectionsamongst geographic snow-flakes in its holiday 2012mail catalog that addressesrecipients through a person-alized letter signed by Eman-uel Perrin, president/CEO ofCartier North America.Additionally, jeweler Tiffany& Co. looked to increase traf-fic to its new store in NewYork’s SoHo district througha targeted mail campaignthat comprised a catalogand personalized letter.To up personalization, luxurymarketers should use cus-tomers’ shopping history totarget them in their homes,per Mr. Ramey.Supplements that reference aproduct that a customer previ-ously purchased or give tailoredproduct suggestions can en-hance direct mail efforts.In 2013 there will be a resur-gence of direct mail that com-plements online efforts.The key is to speak directly toexisting customers.“Using the data you have accu-mulated shows them you care,”Mr. Ramey said. “Fascinate themwith products that you knoware of interest.“Communications shouldbe personalized,” he said.“Assure them that you arenot ever going to wastetheir time.”BMW’s indestructible postcard
  • 17. Events to distinguish luxury marketers through surprises, storytellingive events will be a deciding factor in brand loy-alty in 2013. Therefore, marketers should impresswith elements of surprise, immersive experientialmarketing tactics, digital and mobile touch points and aprecise goal.Luxury marketers should use event marketing to stand outagainst competitors within their community of affluentbrand advocates. Tactics imperative for event marketingin 2013 include mobile integration, two-way dialogue,coherency, meaningful surprises and engagement in thebrand experience.“Moving forward to 2013, luxury brand event effortsshould be part of a larger, seamless strategy,” said GarenMoreno, Los Angeles-based partner at CuldeSac.“Within specific segments of the luxury market, mobile,online and tablet usage is very high, especially for theyounger generation,” he said.“The most successful eventstrategies will seamlesslyintegrate mobile technol-ogy into events and create acommunity before and afterby paying close attention tothe conversation and engag-ing in relevant ways.”Story timeThere is a need within theluxury sector for moreevents that allow consum-ers to participate in the storyof the brand, per Jean-MarcBellaiche, New York-basedsenior partner and globalleader of Boston ConsultingGroup‘s luxury, fashion andbeauty practice.Wealthy consumers are often immersed in the brand expe-rience on digital media. But in the physical world, eventscan bring consumers and potential loyalists even closer tothe brand.One goal of live events should be allowing consumers toplay a role in storytelling.“Consumers want to participate in the brand,” Mr. Bel-laiche said “They participate in the story of the brand ondigital, but in the physical world, there is more opportu-nity to participate with the brand.”Marketers in the spirits category used this strategy in 2012.For example, high-end spirits brand G.H.Mumm tappedaffluent consumers’ preference for experiential marketingwith a new event tactic that shows guests the rituals ofChampagne tasting. The first G.H.Mumm Ball was held inSeptember in Paris.PAGE 17 Luxury Daily LUXURY MARKETING OUTLOOK 2013LBy Tricia CarrEVENTS/CAUSESChampagne Protocoles at the G.H.Mumm Ball
  • 18. The brand’s execution of these events centers on its Cham-pagne Protocoles de G.H.Mumm guide to sabering, select-ing, serving and storing the spirit that is available on amobile application, Facebook app and its Web site.In addition, Scottish whisky maker John Walker & Sons isinviting guests in Asia-Pacific on board a branded yacht topartake in activities that explore the history of the brandand showcase the new triple malt label John Walker &Sons Odyssey.The brand is hosting select consumers, brand partners andinfluencers on the John Walker & Sons Voyager yacht thatlaunched in September. The ship is traveling to nine portsof call including China, Taiwan, Hong Kong, the Philippines,Vietnam, Thailand, Singapore and India over five months.John Walker & Sons is also curating a digital componentof the yacht tour. Authors, photographers and illustra-tors from Asia-Pacific are contributing to an online travelguide that mimics the original guide commissioned by theHouse of Walker.“The importance of experiential marketing isrising,” Mr. Bellaiche said. “It is more than products – it isabout storytelling.”“Marketing is overcrowded,” he said. “There are many mes-sages, so you need to be striking and you need to be differ-ent by pushing original and unity.”Surprise partyConsumers must be delighted by live event marketing forit to be most effective.“It is clear that we will see a strong push towards mobilemarketing in 2013,” CuldeSac’s Mr. Moreno said. “I expectthe best initiatives to be balanced and powerful creatively.“Over the last couple of years, there has been a naturalweeding out of mindless initiatives that resort to takingthe easy way out,” he said. “Luxury marketing is hard workand requires a lot of attention to detail, coherency andcreativity.”In 2012, luxury automakers got creative with events to ca-ter to precise groups of affluent consumers.For instance, British auto-maker Jaguar grabbed thespotlight from affluent maleattendees at the PebbleBeach Automotive Week-end by holding an exclusiveevent with Playboy magazineand debuting the 2013 XJLUltimate in North Americaalongside sister SUV brandLand Rover.Jaguar and Playboy held thefirst joint invitation-onlycocktail party Aug. 17 toshow off the XJL Ultimateand the brand lifestyle to agroup of select customers.Also, British automakerPAGE 18 Luxury Daily LUXURY MARKETING OUTLOOK 2013John Walker & Sons Voyager“It is more than products –it is about storytelling”
  • 19. Rolls-Royce Motor Cars gained exposure to high-net-worth consumers through an invitation-only event inconjunction with Goodwood Revival in Britain.The automaker hosted select customers, prospective cus-tomers, special guests and media over the weekend at theRolls-Royce showroom at March Motor Works that wasrefashioned to be a 1960s dealership for the event. The au-tomaker created the setting with original vintage signage,memorabilia, a showroom manager dressed in ’60s-erabusiness attire and a large safe in one corner of the space.Furthermore, there are four key qualities of event market-ing that make for an effective execution: strategy, coher-ency, surprise and detail, per Mr. Moreno.First, marketers must analyze how the event fitsinto the long-term strategy. The event should notbe a one-time deal.Next, an event should meet a specific goal. Mar-keters should compare the objectives of the eventwith the solutions or ideas that come up at allstages of execution.There should be at least one element of sur-prise in the event experience that is exclusive tothe audience.Lastly, attention to detail is key.“Consumer tastes have changed dramaticallyand, most important, people are incredibly opento new things more than ever,” Mr. Moreno said.“Find unique locations, creative themes, uniquemenus, et cetera.“Most importantly, look at all aspects of the eventas if they are extensions of the brand,” he said.Marketers should also look to propel eventmarketing efforts in 2013 through digital wordof mouth since this can be influential toaffluent consumers.Word of mouth is important to luxury brands.The digital sharing by affluent guests is a pow-erful peer-to-peer marketing tool that shouldbe encouraged.“Most likely, opinion leaders who embrace digital sharingare guests at your exclusive events, so digital sharing isnot incompatible with exclusivity,” Mr. Moreno said.“With global initiatives, most consumers cannot take partin the events, so being able to share in that experiencefrom afar is valuable,” he said. “Embrace digital sharing.“Within an event, RFIDs can change the experience dra-matically, creating community and linking them with theirdigital communities seamlessly. These are powerful toolsif used correctly.”PAGE 19 Luxury Daily LUXURY MARKETING OUTLOOK 2013Rolls-Royce’s retro showroom event at Goodwood Revival in Britain
  • 20. In-store experience to be advanced by 360-degree, tailored approachBy Tricia CarrPAGE 20 Luxury Daily LUXURY MARKETING OUTLOOK 2013arketers should embrace digital and mobile tech-nology to aid in enhancing the in-store experi-ence and provide convenience, transparency andservice to all consumers, but particularly entry-levelmillennial shoppers.Experts agree that technology should not be ignored asbrands are looking to improve the physical shopping ex-perience in 2013. To avoid an all-digital path topurchase, luxury marketers can also offer in-storetouch points within the ecommerce arena so thatconsumers have options depending on where theyare comfortable shopping.“As many brands have made investments in systemsthat enable one view of the customer, we will seemore and more integrations between ecommerceand offline retail,” said Marko Muellner, senior vicepresident at ShopIgniter, Portland, OR.Customer is always rightCustomer-centricity will be a major focus for luxuryretailers in 2013, per Mortimer Singer, CEO of Mar-vin Traub Associates, New York.The integration of in-store and out-of-storeshopping channels will make the customerjourney easier.Mobile should be used to make a customer’s transi-tion between the in-store and at-home shoppingexperience more seamless.Luxury brands and retailers began to use technolo-gy-based service during the in-store experience viamobile point-of-sale technology in 2012.For instance, department store chain Neiman Mar-cus launched a new experience in four of its U.S.locations that serves to heighten customer serviceand the in-store atmosphere.The NM Service app works on a few different levels. To helpentice consumers in-store, the app sends users informa-tion about new arrivals and store events.There are targets set up around store entrances that makethe app live in a different way. When this happens, con-sumers get notifications for new arrivals, store events andthe salespeople working that day.MIN-STORENM Service app
  • 21. PAGE 21 Luxury Daily LUXURY MARKETING OUTLOOK 2013Consumers can choose to link with sales associates whowill know if they want to try on certain items in the dress-ing room or need any additional help.Also, Italian label Gucci turned to mobile to enhance itsin-store shopping experience with an app that aims toprovide a higher level of service for luxury consumers viaemployee-handled wireless devices.Sales associates can offer other items or services that fitwith the customer’s needs during each transaction.The next step is to start providing service before a con-sumer leaves his or her home.For example, luxury marketers can provide an e-reserva-tion system for in-store fitting rooms with pre-selecteditems waiting for the customer, per Mr. Singer.“Retailers will try to make the lives of their customerseasier by introducing more places to shop and more con-venient ways to shop,” Mr. Singer said.In addition, technology should be used to bring theaterback to the store, he said.Quite a few marketers used this tactic in their 2012holiday marketing efforts.Barneys New York enticed holiday foot traffic through amoving art exhibit in its Madison Avenue flagship storeholiday windows created with Walt Disney Co.The Electric Holiday campaign centered on an exaggeratedfashion show featuring altered Disney characters as mod-els in designer couture that was shown in store windowsand an entrance-way electric light show.Also, department store chain Saks Fifth Avenue stepped upits holiday marketing through an art projection light showon the façade of its New York flagship store and windowdisplays that told a story down Fifth Avenue.The retailer offered the light show intermittently in theevenings during the holiday shopping season.Indeed, digital functions that draw consumer foot-trafficin-store will be vital to keeping the physical shoppingexperience relevant in 2013.Barneys’ Electric Holiday campaign characterGucci mobile point-of-sale app
  • 22. PAGE 22 Luxury Daily LUXURY MARKETING OUTLOOK 2013Capabilities such as in-store pick-up, digital appointment-making, instant access to a digital wish list and specialdigital invitations are ways that consumers can be enticedto experience a brand in-person via the digital channel,per ShopIgniter’s Mr. Muellner.Luxury marketers are realizing that as the ecommercechannel grows, brands must shift their focus to the end-to-end customer shopping experience.“They have known this in traditional retail for a longtime and this focus and rigor will come online,”Mr. Muellner said.Next generationLuxury marketers that wish to draw additional custom-ers to the in-store experience should look to entry-levelluxury consumers.Savvy marketers are realizing that what they have done tomarket to boomers does not work among millennials, perChris Olshan, chief marketing officer of The Luxury Mar-keting Council, New York.While boomers favor in-store shopping, millennials aremore likely to be present on digital mediums. Therefore,digital has potential to draw these consumers in-store.Also, luxury marketers will gain more from luring the en-try-level luxury consumer in-store since the aspirationalbuyer is disappearing.Marketers can gain loyal customers in this emerginggroup of millenial consumers by gearing in-store servicestoward them.Harrods, for instance, targeted younger consumers toincrease in-store transactions by creating a series ofevents that culminated in a fashion and music festival.The London-based retailer incorporated youth-orientedbrands and music for The Harrods Festival of Fun to en-courage male and female consumers to try on apparel,beauty products and accessories in its Way In, DesignerStudio and Men’s Denim Lab departments.Millennials want to be treated as special, unique custom-ers, per Mr. Olshan.“They are goingto get sharper,smarter andfaster,” Mr. Ol-shan said.“The biggest tipfor loyalty is tonot assume youhave their busi-ness becauseyou had theirparents’ andgrandparents’,”he said. “Heri-tage brandssee it as a guar-anteed sale, butmillennials wantto be sold to.”“Heritage brands see it as aguaranteed sale, but millennialswant to be sold to”Harrods Festival of Fun CD cover illustration by Sandrine Pagnoux
  • 23. Mobile integration to rev up digital marketing, branding effortsBy Erin SheaPAGE 23 Luxury Daily LUXURY MARKETING OUTLOOK 2013nternet-based campaigns will become increasingly in-tertwined with the mobile medium in 2013 as luxurymarketers update their digital engagement strategyacross all platforms.Luxury marketers should aim for a seamless connectionbetween digital and mobile platforms since consumers areengaging daily on all screens. Also, two-way communi-cation and engagement with consumers should be a toppriority in online marketing campaigns in 2013.“2013 is most likely the year when connecting to the In-ternet via mobile will outnumber those through desktop,which is already the case in emerging markets such as In-dia,” said Carina Liebeknecht, chief client officer of Crea-tethe Group, New York.“Brands targeting the affluent consumer will revive theirfocus on differentiating their online presence throughcustomer service,” she said. “It is the backbone of custom-er acquisition and retention.“Any opportunities to lower the barriers of communica-tion should be taken.”Connecting the dotsLuxury marketing campaigns are going to connect moretechnologies and platforms as the year goes on.Marketers should be sure to keep mobile platforms in mindwhen creating the digital brand experience since consum-ers are viewing digital and social media on mobile devicessuch as smartphones and tablets.Some luxury marketers made strides in connecting thesemediums in 2012 by redesigning their Web site.For example, U.S. fashion label Rebecca Minkoff revampedits ecommerce site to include a social media aggregatorand additional brand content to enhance the overall digi-tal experience for its customers. The site is meant to offera shopping experience that provides context and insightinto the brand and lifestyle.The label also tapped responsive design to offer a mobile-optimized version of the site.For its part, Marc Jacobs Intl. revamped its Web site andenhanced its mobile optimization to increase onlineI INTERNETMarc Jacobs Intl. mobile site“Consumers do not think ofmobile as a differentexperience than ecommerce”
  • 24. PAGE 24 Luxury Daily LUXURY MARKETING OUTLOOK 2013traffic and captivate consumers with improved visuals,mobile commerce features and social sharing options.The Web site includes social integration with platformssuch as Facebook, Twitter, Google+, Pinterest and Storify.Indeed, luxury marketers should make their commercetechnologies available and easy to find on any platform.“Consumers do not think of mobile as a different expe-rience than ecommerce, but it is just a different path topurchase, so marketers should think this way as well,” saidJordan Phillips, founder and director of Lure of Luxe LLC,New York.“In the near future, mobile will no longer be a buzzword,but just another crucial component to any initiative,”she said.Another innovation in digital marketing is the use of dif-ferent kinds of screens. Now consumers are shopping andgathering product information from their smartphone,laptop, desktop and tablet.“There is no first, second or third screen – there are onlyscreens,” said Scott Forshay, Austin, TX-based mobile andemerging technologies strategist at Chicago’s AcquityGroup.“Regardless of their uniqueness in form, factor or func-tion, these connected screens are simply humanized inter-faces allowing us to communicate with and experience adigitally optimized world,” he said.“The challenge ahead will be primarily focused on howbest to address this fundamental shift from a technology-centric marketing model to one of experience-centricity.”Two-way streetConversations between luxury marketers and their cus-tomers will become more important this year as consum-ers become increasingly involved in new Internet andsocial media platforms.“Brands should have a two-way conversation with theirfollowers to get value from their social media platforms,”said Jean-Marc Bellaiche, New York-based senior partnerand global leader of Boston Consulting Group’s luxury,fashion and beauty practice.Some luxury marketers set aside their business needs andsimply interacted with their customers through socialchannels this past year.For instance, New York department store Bergdorf Good-man took to Twitter during Superstorm Sandy to supportits home city and the rest of the East Coast.Bergdorf transformed its Twitter feed into a news sourcefor New Yorkers during the week of Sandy. It providedinformation about making donations and the status ofpublic transportation.The retailer also encouraged consumers to stop by to re-charge electronics and use its wireless Internet via Twitterand Facebook.Also, Italian label Ermenegildo Zegna upped its socialmedia strategy in the fall of 2012 through the launchof a new Google+ channel called “Zegna: The ModernMan’s Manual” to engage male consumers in an onlinefashion dialogue.Zegna’s Google+ page is an editorial calendar and a guidefeaturing style tips and trends for male consumers.Creative director of the Z Zegna line Paul Surridge fre-quents the Google+ hangouts. The brand will havemore virtual encounters to unite fashion bloggers andfans of the brand so that they join in the conversationand share ideas.Affluent consumers will feel more connected to the brandsthat they follow when marketers create these types ofconversations through social media.“The Internet and social platforms such as Twitter and Ins-tagram have made the luxury shopping space feel like oneincreasingly connected small world,” Lure of Luxe LLC’sMs. Phillips said.“In 2013, I anticipate that more brands will expand dis-tribution and manage public relations efforts digitally, asopposed to via bricks-and-mortar,” she said.
  • 25. Digital authentication to be most effective at combating counterfeitingBy Tricia CarrPAGE 25 Luxury Daily LUXURY MARKETING OUTLOOK 2013uxury brands will continue to fight the good fightagainst counterfeiting by offering internal and exter-nal authenticity tools that employees or consumerscan access through digital and mobile media.The state of the global economy provided an environmentfor counterfeiting to become more widespread in 2012.Therefore, marketers need to address the issue head-on bytightening their supply chain and increasing authentica-tion requirements to serve consumers who are looking forand willing to pay for the real thing.“Brand attacks will certainly con-tinue to plague luxury marketers in2013,” said Alessandra C. Vercelloni,director of brand protection forSouthern Europe at OpSec Security,Milan, Italy. “Illegal business func-tions such as counterfeiting, paral-lel trade – also known as grey mar-ket goods – [and] piracy and product tampering are issuesmarketers should address upfront with a comprehensivebrand protection program.“Increased globalization, manufac-turing delocalization, sophisticatedsupply chains, complex distributionmodels, differential pricing policiesand a constant uptick in consumerdemand have all emerged as key eco-nomic factors for luxury brands togenerate revenue,” she said.“However, though this model ap-pears attractive and has increasedmargins for manufacturing and wel-fare in emerging markets, it has alsoleft room for weak links within thesupply chain.”The real dealEfforts to combat counterfeitsoften overlap with marketing efforts such as package de-sign and online sales Web sites.Therefore, marketers can use digital serialization to giveconsumers access to self-authentication tools.Digital serialization delivers many benefits including prod-uct verification and tracking the movement of the productthrough the supply chain, per Ms. Vercelloni.Each product can be verified by anyone at any location.Public availability of serial numbersprevents the unintended purchaseof counterfeits.QR codes are another tool thatmarketers can provide to consum-ers to help prevent the purchaseof counterfeits.Mobile bar codes can be access through a smartphone ap-plication. Once scanned, the consumer can go through theauthentication process.LLEGAL/PRIVACY“Digital authenticationempowers consumers tojoin the fight againstcounterfeits”France’s Comité Colbert, of which Louis Vuitton is a member, joined the fightagainst counterfeits in 2012
  • 26. PAGE 26 Luxury Daily LUXURY MARKETING OUTLOOK 2013Authentication via digital and mobile channels opens updialogue between the brand and the consumer.“Digital authentication empowers consumers to join thefight against counterfeits,” Ms. Vercelloni said. “If digitalauthentication is combined with complex originated ho-lograms – eye-catching, but at the same time easy to un-derstand – this will increase brand awareness and loyalty,preventing consumers from being duped into purchasinga counterfeit.“Digital authentication technologies not only authenti-cate products, but are also a powerful tool for market-ers to interact with the brand’s customer base in the formof segmented promotions or new product information,”she said.“This, in turn, will encourage consumers to know how tospot fakes and where to buy genuine products.”You are the weakest linkThere is a greater need this year for anti-counterfeitingprograms since an increase in communication channelsmeans an increase in opportunity for infiltration.In fact, French luxury industry association Comité Col-bert enacted a campaign against counterfeiters in 2012.The campaign comprised 10,000 posters at 18 airports inFrance and other countries in Europe.French luxury brands lose morethan $7 billion per year due tocounterfeiting, per the group.Chanel, Hermès, Louis Vuitton andSaint Laurent Paris are part ofComité Colbert.Counterfeiters take the weakestlinks in the supply chain as theirchance to compromise a brand’smerchandise, per Ms. Vercelloni.Therefore, luxury marketersshould take necessary steps in2013 to keep outsiders from robbingfrom the brand.The first step in counterfeit prevention is to adopt a mul-tichannel protection program.Brands should incorporate the appropriate technologiesinto the product or label, track and trace distribution andenact intellectual property enforcement through all avail-able legal channels.The next step is to keep a team of employees engaged withthe product along the distribution journey.The third step is to monitor, analyze and secure all aspectsof production, so there is decreased risk.Questions to be asked include: Is this a case of controllingstock distribution? Is someone copying the product? Is thethreat something else entirely? What is the major vulner-ability? Each question matters.“It is not so much that there is one single anti-counterfeit-ing technology that’s universally better than the other,”Ms. Vercelloni said. “Instead, it is more about marketersworking closely with solution engineering to find themost-effective combination at the right total price point.“Additionally, it is important to make sure that the solu-tion is coherent and strategic with a solid track recordof providing luxury brands with program managementthroughout the supply and distribution chain,” she said.Chanel is one of the most counterfeited brands
  • 27. Mobile to stand out as most influential platform in 2013By Erin SheaPAGE 27 Luxury Daily LUXURY MARKETING OUTLOOK 2013obile will become an even more influential plat-form in 2013 as luxury marketers are quickly real-izing the impact of on-the-go technology on theuser experience.Luxury marketers must adapt and keep up with new tech-nologies to remain relevant as multiple screens becomemore incorporated into users’ daily lives. The mobile plat-form is now essential to connect users to the brand expe-rience and will only become more important in 2013.“The mobile medium represents the most-powerfulmechanism for delivering contextually relevant consum-er-brand communications experience in marketing,” saidScott Forshay, Austin, TX-based luxury brand digitalmarketing consultant.“To take advantage of its unique capabilities, successfulmarketing strategies must evolve beyond the employmentof a unidirectional approach to communicating with cus-tomers,” he said. “The customer experience is not definedby the message itself, but the context in which the mes-sage was presented.“Marketers who effectively solve the variables associ-ated with the mobile medium will provide unique expe-riences for consumers, irrespective of the constraints oftime or space, in ways differentiated, highly relevant andintensely personal.”New way of doing thingsMobile connectivity is important to today’s discerningluxury consumer.Luxury marketers have to create new applications and mo-bile technologies to keep up with consumer needs on theever-changing platform.“In 2013, luxury marketers should intensify their focus onhow best to articulate the brand narrative to an audiencewhich demands heightened levels of intimacy, exclusiv-ity, immediacy and relevancy from the brands they mostcovet,” Mr. Forshay said.This is the challenge that luxury marketers will face in thenear future. However, some marketers made strides incaptivating their mobile audiences in 2012.Indeed, a few luxury retailers boosted the in-store experi-ence through mobile apps in 2012.For instance, department store chain Nordstrom beganto offer a personalized mobile shopping experience on itsMMOBILENordstrom for iPad app
  • 28. PAGE 28 Luxury Daily LUXURY MARKETING OUTLOOK 2013iPad app. The three main engagement functions of theNordstrom for iPad app are the virtual dressing room, per-sonalized homepage and social sharing. Users are able toread product details, see additional images, read customerreviews and see if products are available to pick up at anearby store.Also, Bloomingdale’s’ Big Brown Bag app allows users tolearn more about in-store events and special offers, scanbar codes in-store and view additional product details andreviews and find discounts and promotions.Another increasingly important mobile technology is aug-mented reality, which jewelry marketers implemented viaapps released in 2012.In 2012, precision-cut crystal maker Swarovski pushedits how-to book called “Multiface(t)s: Style Yourself withJewelry” through companion iPhone and Android appsthat allow consumers to virtually try on jewelry and seethemselves as the book’s cover model.Users can take a picture with their smartphone’s camerato “try on” the piece of jew-elry. The image of them inthe jewelry can be saved andshared with other app usersin the photo gallery or viasocial media.Also, Danish brand GeorgJensen engaged savvy con-sumers by combining augmented reality, animation andvideo in its Fusion Ring iPad app that it launched in thelast quarter of 2012.Users can build their own Fusion Ring and watch it cometogether through digital animation with the app.With certain technologies, mobile apps can help users en-gage with and become more connected to a brand.“Savvy luxury brand marketers are quickly realizing thatemerging technologies and mediums for communicationssuch as mobile are merely enablers of a far more powerfulinfluence of brand loyalty – that of user experience,” Mr.Forshay said.“Endearing a highly sought-after audience to the brandvia the pervasive interface of the mobile device has provento be infinitely more complex than with the other digitalmedia,” he said.Mobile is a mustLuxury marketers no longer have the option of includingmobile in multichannel efforts – it is now a must-havechannel for any successful campaign, experts say.“Having a thriving and welcoming mobile marketing pro-gram should be a key component for luxury marketers“Endearing a highly sought-after audience to thebrand via the pervasive interface of the mobiledevice has proven to be infinitely more complexthan with the other digital media”Swarovski’s Multiface(t)s augmented reality app
  • 29. PAGE 29 Luxury Daily LUXURY MARKETING OUTLOOK 2013in 2013,” said John Casey,founder and director ofFreshFluff, New York.Also, luxury market-ers should not forgettablets when creatingmobile strategies.“The tablet, like the mobilephone, is becoming a pre-ferred entertainment desti-nation for consumers,” Mr.Casey said. “It would be-hoove any brand, particu-larly luxury, to make sureit has a clever way ofreaching consumers usingthese devices.”In 2012, some luxury mar-keters began to optimize thebrand experience for tablets.Men’s online retailer Mr Porter is showing affluent maleshow to dress for parties through its first iPad app thatacts as an interactive magazine and video hub centered onthe tuxedo.The magazine-style app is split into four chapters thateach focuses on a different aspect of wearing a tuxedo.Also, British automaker Rolls-Royce Motor Cars updatedits Phantom iPad app in the last quarter of 2012.The Phantom app now gives aspirational owners andRolls-Royce enthusiasts the ability to create and custom-ize their own Phantom Series II vehicle, go to Rolls-Roycemedia channels and locate a dealer.However, no matter what sort of mobile device a userowns, mobile efforts should focus on the user experience.Marketers should also keep in mind the transitions usersmake between devices.“Marketers in this new order of constant connectivity mustdevise strategies for a multiscreen consumer experience,allowing for the narrative of the brand to be transportedfrom touch point to touch point in a trans-media engage-ment model where the technologies used are no longerthe focal point,” Acquity Group’s Mr. Forshay said.“The consumer experience is the primary consideration andthat experience is, by its nature, transitional,” he said. “Thesuccess or failure of any future marketing effort will bedefined in the execution of transitions, such as the transi-tions from medium to medium, dialogue to dialogue, andcontext to context.”Mr Porter’s The Tux iPad appRolls-Royce Phantom iPad app
  • 30. Multichannel campaigns to break down barriers between marketing mediumsBy Erin SheaPAGE 30 Luxury Daily LUXURY MARKETING OUTLOOK 2013uccessful multichannel campaigns in 2013 will blurthe lines between the digital and physical realmsin which consumers interact with luxury brandsand retailers.Luxury marketers should aim to create a smooth transi-tion for consumers between platforms in their multichan-nel approach. The most effective campaigns will be thosethat can engulf the consumer without compromising thevalue of the brand.“Luxury brands and retailers that provide a seamless ex-perience across all channels will have a huge advan-tage in 2013, as competitors scramble to catch up,” saidJordan Phillips, founder and director of Lure of Luxe LLC,New York.“Many luxury marketers have simply gone too far in pro-moting and distributing their brands,” she said. “Trying tobe all things to all people does not work.“It is important to remember that luxury would not beluxury without barriers to entry, and constantly workingto keep brand equity intact is incredibly important.”Channels of choiceCampaigns that immerse consumers in a brand’s contentthrough various platforms are the ones that stick withthem the longest.Luxury marketers must be sure that consumers remembertheir message on crowded marketing channels.The message must be available on all platforms, but pri-marily those on which affluent consumers are presentmost often.Marketers that are succeeding in respect to their 360-de-gree marketing approach are enacting print, digital andmobile efforts to push long-term campaigns.A desirable, meaningful message on all platforms, espe-cially digital and mobile, will make more of an impact onthe target audience compared to a single-channel effort.For instance, Chanel’s groundbreaking No. 5 fragrancecampaign with actor Brad Pitt comprised oversized ban-ner ads on The New York Times Web site and YouTube onthe first full day of the campaign as well as a push via itsWeb site, email, social media channels and the PandoraiPhone application.Also, French jeweler Cartier targeted holiday shoppersthrough its multichannel Winter Tale campaign that itspread through various digital and print media.The campaign video was released at the start of the holi-day shopping season and the jeweler continued to use theSMULTICHANNELCartier Winter Tale print ad
  • 31. PAGE 31 Luxury Daily LUXURY MARKETING OUTLOOK 2013theme throughout its multichannel holiday efforts.Next, the brand pushed Winter Tale through its Web site,Facebook page, email blasts, direct mail catalogs and printads in high-end magazines.Luxury marketers should streamline the way they ap-proach their efforts and focus on key demographics andcustomer bases, per Chris Olshan, chief marketing officerof The Luxury Marketing Council, New York.Indeed, digital and mobile platforms have shifted theway in which luxury brands and retailers market to theirtarget audience.“Luxury marketers need to have a consistent brand mes-sage across all fields of marketing,” Mr. Olshan said.“All channels should hold the same message,” he said. “Itis easier to find out quickly if their message deviates fromthe original pillars.”Making connectionsLuxury marketers must consider how easily consumers canfind and absorb their message on multiple platforms whencreating their multichannel approach.The user experience should always be seamless. This isespecially important for digital- and mobile-basedmarketing campaigns.Also, there is no question that the mobile medium is anecessity for luxury marketers. There are various ways toinclude the platform in 2013.For example, L’Oreal-owned beauty marketer Lancômebolstered ecommerce through a revamped mobile experi-ence right before the holidays.The brand’s mobile, tablet and desktop sites were redoneto give affluent beauty buyers a consistent brand expe-rience on multiple platforms. These new updates addedto the user experience with improved category browsing,simplified checkout and a more-detailed product page.Also, French fashion house Chanel added to its multichan-nel push for the J12 white ceramic timepiece through abanner ad on The Cut’s mobile site that revealed an anima-tion displayed over the blog’s content.Users who clicked the mobile banner ad on New YorkMagazine’s style blog were shown an animated displayof white feathers before the ticking J12 timepiece ap-peared. Buttons on the ad let users learn more aboutthe watch, find a Chanel boutique or schedule anin-store appointment.“Many luxury marketers started to incorporate apps, so-cial and shoppable videos and social tools like Thunderclapinto their online, social and digital programs in 2012,” saidJohn Casey, founder and director of FreshFluff, New York.“I anticipate that there will be a continued emphasis onincorporating and expanding marketing programs thatcapture the attention of consumers increasingly reliant onmobile devices, phones and tablets to enhance and sup-plement their shopping experience,” he said.Furthermore, the way that marketers present themselvesboth online and offline should be very similar in multi-channel campaigns so that the experience feels the sameto the consumer, per Jean-Marc Bellaiche, New York-basedsenior partner and global leader of Boston ConsultingGroup’s luxury, fashion and beauty practice.In the near future, consumers will not separate how theybehave online compared to how they behave offline. This isespecially important for luxury marketers to keep in mindwhen they are creating multichannel campaigns.Consumers tend to go back and forth in that theysearch online for a product and then look at it in a store.Therefore, it is vital that marketers blend each of thesebrand experiences.“Consumers in their day-to-day lives are on many chan-nels themselves,” Mr. Bellaiche said.“There is no more separation between how consumers be-have online and how they behave offline,” he said.“There is no more separationbetween how consumers behave onlineand how they behave offline”
  • 32. Out of home advertising to bring life to screen-based campaignsBy Tricia CarrPAGE 32 Luxury Daily LUXURY MARKETING OUTLOOK 2013he most successful out-of-home marketers in 2013will use large-scale placements to showcase brandideals such as design, quality and lifestyle.Out-of-home marketing requiresa significant investment by thebrand so that the placement isable to bring the brand to life ina place where affluent consumersare most apt to spend. A targetedapproach is key in outdoor adver-tising so that the consumers whocan buy into the brand are theones to interpret and be immersed in the message.“We have seen outdoor ad spend double this last year fromexclusive brands and services,” said Brad Porter, CEO of B.E.Porter, Beverly Hills, CA. “Their efficient and directed ad-vertising has reaped them increased profitability in a chal-lenging marketplace, and they want more.”Larger than lifeLuxury marketing in 2013 should consist of experientialtactics so that products and services become desirable inthe way that they enhance the life of the buyer.Large-scale outdoor advertising is an effective way tobring life to products and services, per Mr. Porter.Marketers that want to influence affluent buyers shouldpurchase ad real estate on billboards.Consumers will see the brand ideals come to life in a glam-orous way just as luxury events and in-store marketingallow consumers to experience the brand.Luxury marketers should use billboards to target areasin which affluent consumers are most willing to makeemotional purchases.In 2012, British fashion label Burberry placed large-scale out-of-home ads inside New York’s iconic GrandCentral Terminal that could have spurred purchases fromeager tourists.The brand placed an image ofactor Eddie Redmayne in a navysuit holding a rain jacket and um-brella on large digital screens thatare approximately 10 feetabove the floor of the station’smain concourse.The ad panes flashed between a few different marketers,with Burberry being the only luxury brand featured at thetime, and appeared between train track entrances.“In this information age, it is easier to target specific envi-rons where superfluous shoppers abound,” Mr. Porter said.TOUT OF HOME“In this information age,it is easier to targetspecific environs wheresuperfluousshoppers abound”Eddie Redmayne for Burberry
  • 33. PAGE 33 Luxury Daily LUXURY MARKETING OUTLOOK 2013Right on targetDespite its mass-reach, out-of-home advertising must betargeted to the affluent audience.Large-scale out-of-home efforts need to tap what afflu-ent consumers are craving: status, exclusivity, high-designand pleasure.Affluent consumers can decode messages in a differentway than most consumers, per Mr. Porter.The triggers can be vastly different and surprising.For instance, affluent consumers do not solely careabout logos and brand names, but want to see theelements of design and performance shine through inmarketing efforts.British marketers Burberry and Alfred Dunhill each pre-sented out-of-home experiences to consumers in interna-tional markets in this manner.Burberry began its ambitious event series in 2012 that ig-nited a global campaign focused on fashion, weather andthe combination of physical and digital channels.The label’s first fully-immersive event experience calledBurberry World Live took place April 26 in Taipei City, Tai-wan, to celebrate the opening of its first flagship store inthe country.The event focused on weather, labeling Burberry as a brandthat protects consumers from the elements with fashion.Also, British apparel and accessories brand Alfred Dunhillcombined sight, smell, sound and vision in a recreation offamed Trafalgar Square in London that displayed a simula-tion of all four seasons over the course of one day.The event was broadcast March 16 to more than 1,000global guests in Shanghai, China, as the third of a series ofinstallations. Trafalgar was one of the longest live singleCGI sequences ever made to simulate a full year of Britishseasons over one day, claimed the brand.Luxury marketers should incorporate the 360-degreebrand experience into the outdoor ad placements so thataffluent consumers can take in a consistent message, butthrough a platform other than digital.“All consumers are the same – the thought is as under-standable as it is tempting,” Mr. Porter said. “Gettingthrough to basic emotions can be key to marketing com-munication success.“In some categories, the market leader benefits from sig-nificant me-dia invest-ment,” hesaid.“A strategyto outspendcompetitionresults in asignificantstab at prof-itability andthe gen-eral pub-lic ends ups p a m m e dwith inef-fectual eyepollution.”Burberry World Live in Taipei City, Taiwan
  • 34. Print to be most influential in 360-degree campaignsBy Erin SheaPAGE 34 Luxury Daily LUXURY MARKETING OUTLOOK 2013uxury marketers should incorporate print market-ing into a larger multichannel push for it to havethe most impact in 2013 as print media may be onthe decline.Brands will continue to place print ads in 2013, especiallyin high-end magazines and newspapers that target theaffluent audience. Although the print industry is underthreat of diminishing advertising, it can still be a usefulmedium to reach affluent consumers.“I am not convinced that dead-tree publishing is over,”said Matthew Egan, strategy director at Siegel + Gale, NewYork. “There is no question, [however], that it is diminish-ing in relevance.“Print still delivers a well-targeted, high-quality reader ex-perience,” he said.“That quality is key to luxury marketers and that is whythey have not abandoned the medium.”Not over yetPrint is losing out as consumers today spend 6 percent oftheir time with the medium versus other major media, ac-cording to Mr. Egan.Also, U.S. print expenditures have fallen from approxi-mately 20 percent of total advertising spend to less than10 percent.“The data tells us that print is less prevalent today as amarketing platform,” Mr. Egan said.However, many luxury-focused magazines are seeing anincrease in the number of ads and ad revenue than theyhave in previous issues.Magazines such as Architectural Digest, Departures, Town& Country and W saw increases in the number of print adsin their publications in 2012.Condé Nast’s Architectural Digest rounded out 2012 witha 10 percent ad page increase over last year with the De-cember issue on its own boasting a 15 percent ad pageincrease in comparison to the year-ago period. The maga-zine contained 86 pages of ads.Hearst’s Town & Country’s September issue was up 7 per-cent year over year, which correlated to the 10 percentyear-to-date increase.Also, American Express Publishing’s Departures maga-zine rounded out a successful calendar year in 2012 dur-ing which it saw ad revenue rise 12 percent and ad pagesgrow by 2 percent. In 2013, Departures will move into a900,000 rate base effective with the January 2013 issue,which is a 2.9 percent increase from the 2012 rate base.Condé Nast’s W magazine was up 105 percent in ad pagesin its November issue compared to the year-ago period.The issue was W’s 40th anniversary issue.Furthermore, new publications geared toward affluentconsumers popped up throughout 2012.Condé Nast-owned Fair-child Fashion Media de-buted M magazine in2012 that is targetedto affluent males witha household income ofmore than $200,000.Also, DuJour magazinedebuted in the fall of2012. It was founded byformer Niche Media CEOJason Binn in collabora-tion with the Gilt Groupe.The publication is distributed through 250,000 direct mailcopies and 15,000 copies displayed on newsstands.LPRINTFairchild Fashion Media’s M
  • 35. PAGE 35 Luxury Daily LUXURY MARKETING OUTLOOK 2013New print magazines aid brands that use the medium intheir campaigns.Furthermore, both Robb Report and Departures plan to re-lease new publications for affluent consumers that focuson the home.Robb Report will introduce a new home magazine titled“Home & Style” in March.Departures will release a new home and lifestyle magazinethis spring called “Home + Design.”“While print helps to establish an image, it will increasing-ly be used as a point-of-entry into a broader, multichan-nel marketing program that reaches consumers across arange of media,” Mr. Egan said.Incorporating technologyAs print marketing evolves, there will be more integrationof technology into static ads.This strategy was seen in magazine ads placed in 2012 thatused mobile-enhanced content and digital watermarks.Toyota Corp.’s Lexus engaged Sports Illustrated readers byletting them interact with an ES advertisement with theiriPad to add movement to the static page.The automaker used CinePrint technology in this effortso that when users put the Lexus ES print ad over theiriPad while playing a video found on the tablet version ofthe magazine, there were light and sound effects on theprint ad.Also, Crystal Cruises bridged the gap between old- andnew-world technology via print ads that use mobile ap-plication Aurasma to show additional video content.Breaking away from 2D bar codes typically used in printads, Aurasma technology allows brands to engage on mo-bile without a bar code in their ads. Users who have down-loaded the Aurasma app can hold their smartphone overthe ad and wait for it to come to life.Luxury marketers will integrate more digital technologyinto the print medium in the future, per Mr. Egan.There will be three main areas that comprise these moves:technology integration, media integration and retail inte-gration.Technology integration will feature components such asQR codes, augmented reality and geo-fenced content.Media integration constitutes a print advertisement serv-ing as the gateway to other forms of media as in anymultichannel campaign.Lastly, retail integration will make the print ad an entry-way to a mobile commerce experience.“Luxury marketers will continue to use print as an anchorfor their brand campaigns,” Mr. Egan said. “I expect to seemore innovation around integrating print into broaderomni-channel brand experiences.”Crystal Cruises digitally-watermarked print ad
  • 36. Radio to remain relevant with future innovationsBy Erin SheaPAGE 36 Luxury Daily LUXURY MARKETING OUTLOOK 2013uxury marketers should continue to make use of ra-dio-like channels in 2013 due to the innovations in themusic industry such as Pandora, iHeartRadio, Spotifyand other digital and mobile applications.These digital music channels have increased the usefulnessof radio in the modern world. Luxury marketers shouldincorporate these channels into their digital advertisingstrategy to reach young, affluent consumers in 2013.“Given new apps and Web services such as Pandora,iHeartRadio and radio streaming apps, radio advertising isactually still a relevant medium for marketers,” said JohnCasey, founder and director at FreshFluff, New York.“Since services and apps are adestination for young as well asolder adults reliant on apps fortheir musical choices, it makessense for luxury marketers tryingto reach a younger demographicto advertise on these emergingradio platforms,” he said.“So long as radio streaming appsproliferate, and as more andmore mobile devices lend them-selves to making radio accessibleto a wider audience, radio adver-tising should actually be a con-sideration for marketers.”Medley of marketersIn the past, insurance companies and automotive manu-facturers were the primary advertisers present on theradio medium.But the players have changed ever since mobile came intothe picture.In 2012, Giorgio Armani took its digital advertising to anew level by promoting a store opening through radio anddigital ads on music provider Spotify.There was a banner ad at the bottom of the Spotify desk-top app and a takeover ad of which consumers had to ac-tively click out.These ads linked to the Armani Web site where con-sumers could check out a special playlist and look at alllines including Emporio, Giorgio, Armani Collezioni andArmani Junior.The goal of the campaign was to drive traffic to the Empo-rio Armani store in New York for a live performance on theday of its opening.Also, BMW strayed from traditional radio advertising forits DESIR3 campaign through an ad placement on Spotifythat connected to a microsite for its 3 Series.Consumers who clicked on the ad were brought to a pagewhere they could explore the 3 Series by scrolling withtheir cursors.Meanwhile, luxury marketers such as department storechain Nordstrom and French fashion house Chanel placedLRADIOArmani Spotify campaign
  • 37. PAGE 37 Luxury Daily LUXURY MARKETING OUTLOOK 2013ads in Pandora’s mobile app during 2012.Nordstrom was aiming to increase traffic to its mobile sitethrough a new advertising initiative that enticed affluentconsumers to shop the latest winter products during theholiday season.The retailer ranthe ad on Pan-dora’s iPhoneapp. The adsfeatured winterboots.Also, Chanelpromoted itsNo. 5 fragrancecampaign withactor Brad Pittvia a mobilebanner ad onPandora. Thead linked tothe label’s mo-bile commerceWeb site.On-the-go radioMost luxury brand radiomarketing efforts in 2012were placements on Internetservices and mobile apps.These developments in radiolistening are helping market-ers reinvent the idea of radiomarketing.“Other technologies have ac-tually enhanced the viabilityof radio marketing, such asapps and the Internet, andhave allowed for radio to beeven more accessible thansimply through an actual ra-dio, stereo or a car,” Mr. Caseysaid. “Radio comes in manyvarieties.”These new radio platforms, Web sites and technologiescan also allow users to get a more personal experiencesince they can listen to certain playlists, genres or artists.“These are interesting channels for reaching consumers,because they offer personalized products for their audi-ence and over time should be able to build substantial fol-lowings,” said Ron Kurtz, president of the American Afflu-ence Research Center, Atlanta.However, luxury marketers should be aware thatreaching their target audience on radio and Internetradio platforms may be more difficult comparedto using other media platforms such as mobile, digitalor print.“I’m not sure that these platforms’ audiences can be ef-fectively segmented so that marketers of luxury brandscan buy advertising for exposure to just the people withthe profile of the affluent consumers they need to reach,”Mr. Kurtz said.“In addition, there is an issue of whether luxury productscan be effectively presented simply with voice and with novisual of any type,” he said.BMW’s DESIR3 campaign on SpotifyChanel No. 5 Pandora ad
  • 38. Cable spots hold most value for luxury marketersBy Erin SheaPAGE 38 Luxury Daily LUXURY MARKETING OUTLOOK 2013TELEVISIONuxury marketers that are looking to use television ad-vertisements in 2013 should rely on cable channels toreach affluent consumers.Marketers need to keep in mind the meaning and con-tent of their message to determine the best TV channel onwhich to place it since picking a similar program helps it toresonate best with the audience. Also, marketers that planto use TV should be ready to invest in a good campaign.“Luxury marketers should avoid broadcast TV, which is tooexpensive and does not cover enough high-end consum-ers,” said Al Ries, chairman of marketing strategy consul-tancy Ries & Ries, Roswell, GA.“Our experience suggests that the most-effective TV com-mercials are in shows that are consistent with the ad-vertiser’s message,” he said. “If an advertiser has news toannounce, for example, then CNN or another cable newsshow might be the best medium to use.”Big investmentTV is a strong, yet expensive marketing medium.Luxury brands that use TV spots as part of their marketingefforts should be preparedto invest in the campaignfor it to be most successful.“TV requires a relativelymassive budget to be usedeffectively,” Mr. Ries said.“An advertiser needs tospend enough money on TVto get the noise level.“Small TV budgets are usu-ally a waste of money,”he said.Celebrity endorsements canhelp luxury marketers get the most from a TV spot.However, marketers should be sure that the celebrity is agood fit for the brand.Also, more marketers are looking to TV and Internet toadvertise since the effectiveness of the print mediumis declining.“The issue for luxury goods manufacturers is, should wedrastically cut back on print in order to have enough mon-ey to launch an effective television marketing program?”Mr. Ries said.Last year, many luxury automakers took to TV to promotetheir brand and new vehicles.Automakers such as Jaguar, Audi, Lexus, BMW, Land Roverand Mercedes-Benz released TV spots in 2012 to promotecertain vehicles.For example, Land Rover targeted affluent males with itssponsorship of ESPN college basketball.Land Rover accelerated male interest for the 2013 RangeLLand Rover ESPN halftime sponsorship
  • 39. PAGE 39 Luxury Daily LUXURY MARKETING OUTLOOK 2013Rover Evoque model through a short film titled “TheCollector” that showed off the brand’s history of luxuryand capability.The commercial debuted during the Florida State Univer-sity versus Virginia Polytechnic Institute and State Univer-sity football game on ESPN.The sponsorship included TV spots and a prominent pres-ence during the half-time analysis.Audi chose to release a commercial during a sportingevent this year as well.Audi hyped its S model range via a dedicated TV campaignthat began with a commercial that aired with NationalFootball League games in addition to placements on selectcable networks and online media.The automaker also secured a commercial spot during theSuper Bowl XLVII, the automaker’s sixth consecutive place-ment during the game.Additionally, Audi took a turn in its marketing efforts forthe A6 model by premiering a TV commercial that usedchild humor to appeal to consumers during the NationalHockey League playoffs.Similar to luxury automakers, marketers in other catego-ries should look to advertise on specific cable channels toget the most from their dollar.Ralph Lauren, for example, became a corporate sponsorof Masterpiece, the drama series on PBS that boasts TVprograms such as Downton Abbey and Sherlock.The brand chose to partner with PBS’ Masterpiece sinceboth represent the same qualities, per Ralph Lauren.“There is an array of cable channels that are far less expen-sive and have a much higher percentage of luxury buyers,”Mr. Ries said.Out of the slumpThe luxury industry is expected do better in 2013along with the economy, and affluent customers will bespending more.Marketing budgets are likely to rise with this upturn,which leaves more funds for marketers to invest inTV advertising.“We expect the luxury goods market will be up sharplynext year, along with marketing budgets of major compa-nies in the field,” Mr. Ries said.“Wealthy individuals are going to increase their spendingafter years of holding back, since nobody wants to spendbig when so many Americans are out of work,” he said.“But high-end consumers are getting older and they arelikely to be thinking, I have worked hard all my life and thisis my chance to enjoy the fruits of my labors.”Audi S8 commercial